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I talked before about why it is so hard to get out of credit card debt [Oct 6, 2009].  I’m going to hit on the same concept here but explain why with some actual numbers.  In my recent posts, I’ve been talking about my savings goal of $15,000 per year.  You take a look at a similar goal of paying off $15,000 in credit card debt.

In my previous article, Taking a Hard Look At Expenses To Boost Savings [Nov 25, 2009], I talked about the changes I could potentially make to some of my expenses and my lifestyle in order to ramp up my savings.  Even if I’m able to do all these things, which will be difficult, I’m still dependent on some bonus/commission income to get me to my goal.  Hardly a given.

So, you can see how difficult it is to get to saving $15,000 in a year.  When looking at that number as credit card debt, you also have to pay interest so your amount is even higher, maybe a decent bit higher.  It really is crazy how hard it is to pay off any level of significant credit card debt when you actually dive into the numbers and see what it would take in order to do it.  It becomes very obvious why so many people take years and years to pay off this debt, if they ever actually do pay off their debt.  I think the more normal course these days is bankruptcy.

Now, you know why Dave Ramsey and his famous debt snowball technique often requires drastic action.  He doesn’t tell people to quit drinking lattes at Starbucks.  He tells people to sell a car, move into an apartment, get a second job – big, drastic changes.  This is because Ramsey knows how difficult it is to pay off this kind of balance on a credit card.

The sad thing is that every year that goes into paying off a credit card is a year wasted on pursuing financial independence because financial independence requires significant savings.  Until you’re debt free, you’re not saving anything.  If you’re in this boat, you have to act now and act big.  Summit that mountain of debt so you can start the next journey towards financial independence.